XCINEX

Prima Cinema, Screening Room and now XCINEX. These three companies are promising what many in Hollywood thought was impossible – to offer consumers access to theatrical movies at home, the same day they launch in cinemas across the country. It’s a controversial subject and one many in the movie industry will refuse to discuss – but could we finally be coming to a stage where Hollywood is warming to the concept?

CE Pro Europe recently spoke to XCINEX founder Cihan Fuat Atkin about how his company plans to revolutionise the way movie lovers consume media at their homes. He recognises that while his start-up may not be the most well-funded, or backed by Hollywood celebrities, it is one capable of changing the way we consume media. He believes that it’s not a case of if day and date movie streaming services will come to the home cinema environment, it’s a case of when – and if he gets his way, users will be able to enjoy first-run movies from the comfort of their sofa by the end of 2017.

XCINEX began in 2012 as an idea to improve the streaming services currently available to consumers everywhere. That means the likes of Netflix and Amazon Instant Video – services that Cihan argues are inherently broken. While it’s great being able to access all the content on the fly from literally any device that users happen to have with them, the content available on Netflix is not always the content that users want to enjoy.

“I was a little upset because it was old content and I have a very nice entertainment system at home,” Cihan notes. “Why are people wasting money on Netflix? All this stuff is already online for free. Why are people spending money on subscriptions for this old stuff?”

Cihan makes a good point – much of Netflix’s content is over a year old and, while he’s firmly against piracy, much of the content can be found online if users know where to search. He does admit that many people spend the $9 a month on a Netflix subscription because they’re too lazy to find it elsewhere, or because of the great original content that services like Netflix now offer. It’s that last point that could be key to Netflix’s continued success – its original content is a big reason why users pay the subscription fee; everything else is a bonus. It’s a model currently being adopted by not only Netflix but Amazon Instant Video and Hulu.

While those streaming services offer great access to original content, Cihan argues that consumers are wanting more – they want access to theatrical content and live events without having to leave the comfort of their own home. This is the issue Cihan and the team at XCINEX has been trying to solve for the past four years.

“The reason why users cannot watch theatrical content and live events from home is because the content creators have no idea how many people are in the room. Plain and simple,” Cihan says. “The content owner doesn’t know how many people are in the room and therefore they can’t risk losing money.”

This was the big question that was floated around when Sean Parker, the infamous founder of Napster, teased a new day and date streaming service dubbed Screening Room. Sean’s service relies on a flat fee of $50, however Cihan thinks that Screening Room still has a major issue with that fee, one that could be detrimental to Sean’s service.

“There is an issue here – just because of the numbers. Usually tickets at movie theatres in the US are around $15 on average. So the $15 ticket that exhibitors typically charge will cover about three people. So you’re saying if I have seven people in my house and I have a screening room, then the exhibitors just lost money from four people. Well what studio is going to be stupid enough to do that?”

So how does XCINEX propose to fix the problems that plague Screening Room? Well, the company is turning to technologies that consumers are already familiar with thanks to devices such as the Kinect and PlayStation Move.

“The technology already exists where we can detect people. From there we can develop a technology where we can detect people who are sitting and watching a TV and facilitate selling tickets to those people on a per-viewer basis.”

That’s XCINEX’s goal, to replicate the theatrical sales model, but in a user’s own home. Cihan says that by replicating that model, XCINEX will be able to provide access to not only theatrical movies but also live events, comedy shows, Las Vegas shows – the list is endless.

The End Of Piracy As We Know It?

XCINEX has some ambitious goals and getting Hollywood on-board with a day and date streaming service is a momentous task. Despite that, XCINEX believes that it can do more than just provide a service for people to enjoy theatrical content, but he also believes that the XCINEX could potentially help eradicate the world of piracy.

While the launch of Screening Room was criticised heavily for charging a flat fee, the company’s biggest opponents had a bigger issue – and that was its lacklustre security. Sean Parker and co noted that its company has instigated robust protection for rights holders, such as watermarking, but Cihan argues that it doesn’t go far enough.

“They say they have the watermarking and other security features – we all do. But on top of that, it’s not enough. The watermark is only good if I share it online, but if I make copies to watch myself, or share the content among my friends, there’s no way you’re going to catch me.”

Thanks to the camera detection technology that is available for detecting users’ faces, Cihan believes that same technology can be put to good use ensuring users are not trying to bootleg the film. That includes algorithms in the camera software that are designed to detect camcorders, mobile phones, tripods and other things of that nature. If the camera on top of the TV detects those things, then it will immediately stop the film until they’re removed.

That is just one security measure that XCINEX has implemented, the company says it has many more. Despite the different layers of security technology, Cihan stops short of calling it 100% secure. He believes that 100% security is an impossibility and there’s not a single soul on the planet that will be capable of that feat. But what his company is trying to do is to implement layer upon layer of protection that will make it too much of a headache for the average consumer to bypass.

So what about that 5% vulnerability? Well, there are a number of protections in place to deal with that too – and it’s that 5% where XCINEX shares its commonality with Screening Room. That’s because the watermarking technology in use is specifically designed to prevent that 5%; meaning if a user does bypass all the other security methods they will still be traceable. By decoding the watermark XCINEX will be able to know exactly where a bootlegged copy of the film came from – which location, which user and which session the piracy took place. All this information is linked to the biometric data that XCINEX will collect with every content purchase on its service.

So what about the facial detection technology? Surely it cannot be 100% reliable and users could simply position the device away from the users watching the screen? Well, unfortunately for those wishing to save a couple of quid, that’s not possible.

The camera itself enjoys a 180° field of view and it sits right on top of the TV like a soundbar, so if a user can see the TV, the camera can see them. While from the outside the camera module will look stationary, inside the parts will be constantly adjusting like eye balls – scanning the room to ensure the user remains honest about how many people are watching the film or live event. Cihan says that the cameras are capable of seeing wall to wall, ceiling to floor.

“We don’t want people to be sitting up in a second storey open loft and looking down on the TV and watching the film without paying. So the device is actually very smart, once you first set it up, it’ll actually scan the room to determine the layout of the living room. So then as long as it’s still in that location, it will know exactly how to scan the room for optimum efficiency.”

What about users who wish to change the location of the camera? Well, that’s not possible either. “There’s a small camera that looks back at the TV to authenticate it’s on the TV we’re sending content to. That small camera looks at the top portion of the screen, where we have a small mark that comes in and out, with the mark changing every so often. That technology means that if the device is put on another TV or moved to any location that isn’t the TV playing the film, then the system will automatically know and stop playing.”

“Also the device, once the movie starts streaming, or the content is streaming – is tamper-proof. It has motion sensors, it has proximity sensors, so you can’t really put a box over it with a cut out window so you can regulate its field of view and you also can’t move it or tamper with it once the content starts streaming.”

With all these security devices in place, XCINEX believes that it could fully eradicate piracy. “People will not want to pirate because they can access the top quality version for a couple of bucks.”

A Streaming Service Like No Other

Would you describe Netflix as an entertainment company or a technology company? Many would argue that Netflix may be both, but with its original content studio and subscription-based model, it’s probably a lot more akin to HBO than Apple. XCINEX is different however, it’s a technology company ran by an engineer at heart.

Netflix is trying to be everywhere on every device, while XCINEX is only interested in being in one place at any one given time – the user’s living room. Netflix only requires an email address and password to access its service, while XCINEX will require biometrics and a camera capable of facial detection in order to authenticate each individual purchase. The two could not be more apart.

It is not the service itself that makes XCINEX inherently special, but the technology behind it. Anyone can create a content portal, but not everyone can create one that claims to be as secure or as efficient as XCINEX. But what exactly is the company’s technology?

Well, as explained, at the heart of the system is camera capable of detecting every single face that happens to be in front of it. But that’s not enough – what if the camera detects a large dog as a human? Or a statue or a poster and tries to charge the user for a person that isn’t actually there? Well, thankfully the technology goes a bit further, with the addition of thermal cameras which can work in-sync with the facial detection technology to detect whether an actual live human being is where it believes a face is.

“If there’s body heat coming from that face then it’s real, if there’s no heat coming from it then it’s either a poster or statue,” Cihan states. “If you have a big dog – it’s very unlikely – but its face might be caught as a human – but because pets and animals have a different type of heat radiating from their body, we can detect if it’s a human or animal.

“A lot of the tests we’ve done, even with big dogs, the facial detection didn’t detect their face as a human. But we had to implement some type of parameter just in case, because you don’t want someone to have a big Labrador retriever or big dog and the system all of a sudden stops and tells you that you have to buy another ticket for your dog. You’re going to be pretty pissed.”

While it’s helpful to know that the system works – and won’t overcharge users based on the number of pictures or statues they have in the room, or the size of their dog, XCINEX took the technology a step further.

“We realise some families might have kids that are under three years of age, who probably have no idea the movie is even playing but are going to be in the room. So we don’t want the machine to detect these faces as a fourth person when it’s just a two-year-old kid. So what we’ve done is use stereovision to detect distance, so if we know how far you are sitting from the TV we can use that algorithm to detect if you’re an adult or an infant from the size of your head in the image.

“We had to keep it at infant level because after three years of age you could be a toddler or a little person. So we can’t really jump into that grey area. Until three years old it’s pretty obvious that you’re an infant; there aren’t many small people that are the size of a two-year-old.”

With all this data being processed and a camera constantly monitoring a user’s living room, there are bound to be the typical privacy questions. It came with Microsoft’s Kinect camera and it will come with XCINEX.

“Of course, a lot of consumers are going to have privacy issues. Surprisingly enough some of the younger consumers of generation X and Y aren’t too interested in that issue. It’s been a lot of the older generation concerned about the privacy. Regardless, we’ve engineered this to be absolutely privacy-safe. The way we do that is the device has no memory, and when the device is doing the actual scanning of the room, it’s fully disconnected from the Internet.”

XCINEX is a streaming service like no other largely due to the technology, but also because of the diversity of content it plans to offer. Screening Room is specifically designed as a service for those wanting to consume movies – XCINEX isn’t. In fact, the company plans to coerce event companies onto the service – with the likes of Cirque Du Soleil able to offer tickets to live events that people can enjoy from the safety of their home.

“With XCINEX we’re pursuing the theatrical market, live concerts, live comedy shows, fashion shows, Vegas shows – because we don’t control the content, we are a storefront.”

Unfortunately, XCINEX is not without its limitations. While Netflix, Amazon Instant Video and other streaming services work no matter the home cinema set-up, that won’t be the case for XCINEX. The company has stated that at the time being the service will not support projectors, which will be a key factor in its popularity with custom installers.

Is This The End Of The Movie Theatre As We Know It?

XCINEX is not trying to be like every other movie streaming service. It wants to be different – and crucially, it needs to be different in order to achieve what it wants. For years Hollywood has struggled to release its films simultaneously at cinemas and for home consumption – and whenever it has tried it has received severe backlash from movie theatres. In fact, it’s not simply solely related to simultaneous releases – in 2010 Disney revealed that it planned on reducing the gap between a theatrical opening of Alice in Wonderland and the film’s DVD release from the standard 17 weeks to 12 weeks. At that time all three major cinema companies in the UK: Cineworld, Odeon and Vue, refused to play the film in their 3D screens unless Disney backed down. That meant Disney would have lost out on a substantial portion of the $64m the film eventually took in that market.

If a cinema chain reacts that badly to a five-week difference in a home entertainment release – then can you imagine how badly they will react to a simultaneous release? Well, like Screening Room, XCINEX wants to work with cinema operators to help them grow their business, rather than cannibalise it.

“We’re going to give movie theatres 20% of each cut. So the XCINEX member is actually finalising the transaction to purchase tickets; there’s a process that they have to do in order to complete the transaction. Which is: according to their address on file, or their GPS signal on their mobile device or their IP address, they will have a list populated of the nearest exhibitors in their area. So then I pose this question: if you weren’t using XCINEX, what exhibitor would you be using to watch this content?

“From that list, from five or 10 exhibitors, you would pick one. So once they’ve picked that movie theatre, automatically, 20% of that transaction goes to that theatre. So what happens is theatres can make money from movies that are potentially not even playing in their theatre. And they could potentially make money when the theatres closed, or after hours or early in the morning or middle of the night.

“So what we’ve said is we’re not going to cannibalise your business; we’re going to help you increase your business because there’s a huge market that’s not coming to the theatre. Either they don’t like it, either they’re sick, handicapped, elderly or they just don’t like being in dirty seats; whatever the case may be. Or they don’t like the guy behind them who is always making noise. Whatever the case may be, this is a way to expand the market.

“Studios or content owners will get 70% of the ticket, the exhibitor will get 20% of the ticket and XCINEX will get 10% through our secure services.

“The reason we’ve made it that way is that if we decide what exhibitor gets the ticket, then we’re blamed for favouritism. Oh, you like Regal better than you like AMC; if the studio does it then they’re blamed with favouritism. But if the consumer does it, they can’t say shit.”

XCINEX Pricing And Release Date

Excited about the prospects of a day and date movie streaming service yet? Well it’s a little while off yet. XCINEX first filed for a US patent for the service in March 2014, which it was finally awarded in October 2015. Patents have also been awarded in Japan and South Korea, while European patents are currently pending.

The final product is being developed however, with XCINEX planning a release in late 2017. It is already working with RKS Design, an LA-based design agency that has won over 200 awards designing products for a range of start-ups.

“One of the main reasons we chose them over anyone else is because RKS has travelled to over 120 countries so far, and every year they travel to a different part of the world and they learn about the culture and lifestyles in that area. So that helps them design a product that is more global, more consumer-friendly to the world rather than one market; one segment.

“Our goal is in the next five years is be a global entertainment streaming platform, so we wanted to design not only our hardware but our UI that will appeal to an international market rather than just the US.”

At launch XCINEX plans to sell its set-top box for $160 (with early adopters set to get a discount) – much less than the current dominant player in the day and date streaming world, Prima Cinema – which charges $35,000 for the box and $500 for a rental. XCINEX also says it will forgo any membership fees, so when a user buys its box, it’s theirs for life and the user only needs to pay for the content they watch. Pricing for that content will not be under the control of XCINEX either, with content creators having ultimate control – which includes regional ticket pricing.

The big issue facing XCINEX at the moment is getting content creators on-board. CE Pro Europe asked Cihan the question, but it’s one that he couldn’t answer.

“I definitely cannot answer that question, because that would be hanging myself. But what I can say is that from day one we have been in close relations with all the major six. As a matter of fact I personally cold-called all major six studios when we first started and I just kept calling and calling and calling them before they had enough of me, so they finally said ‘we’ve had enough, come in for a meeting’. So we went for a meeting with all of them, and they really thought it was a brilliant idea. And they said it was probably the most feasible, and most ingenious idea to ever come through the door – but at the time we had a prototype that was far from the final product, so of course the studios said ‘it’s very interesting, it’s a cool product but you’ve got to come back when you’ve got something more meaningful’.

“So then a year later we built the beta, which didn’t have full functionality, but it had all the main bells and whistles. So we went back to meet the studios and they said ‘okay, this is awesome’. There was a 180° difference in their approach. They all said ‘it’s really cool’. The good thing is it seemed like when we first went in with the meeting and we talked to them it put a bug in their ear, and the whole year that we were developing the beta these executives had a situation in their life where they were like ‘damn I wish XCINEX had existed’. Either they wanted to take their kids to the movies, or they were just going through a hard time scheduling a family.

“So when we went back with the beta a year later their attitude was totally different. They said: ‘this is totally cool; how soon can you get this out on the market?.”

Cihan couldn’t comment on any commitments from studios regarding content however – and that will be the biggest bellwether as to whether XCINEX will be successful or not. Many have tried to offer first-run movies at home, only to flop due to a failure to get commitments from movie studios. If XCINEX fails to get those commitments, then this could be a product that arrives dead on arrival.